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The Congressional Budget Office just released their study on the effect of raising federal workers minimum wage. Not only do they project the net effect to be a reduction in the number of jobs, but also of the total increase in payout to workers, only 19% will go to those below the poverty threshold. So as I have continually stated, the only outcome will be inflation, with a net neutral effect on "poor people" (some lose their job, some make more money).
"In addition to affecting employment and family income, increasing the federal minimum wage would affect the federal budget directly by increasing the wages that the federal government paid to a small number of hourly employees and indirectly by boosting the prices of some goods and services purchased by the government."
Link to CBO study:
http://www.cbo.gov/publication/44995
"Once fully implemented in the second half of 2016, the $10.10 option would reduce total employment by about 500,000 workers, or 0.3 percent, CBO projects (see the table below). As with any such estimates, however, the actual losses could be smaller or larger; in CBO’s assessment, there is about a two-thirds chance that the effect would be in the range between a very slight reduction in employment and a reduction in employment of 1.0 million workers."
"The increased earnings for low-wage workers resulting from the higher minimum wage would total $31 billion, by CBO’s estimate. However, those earnings would not go only to low-income families, because many low-wage workers are not members of low-income families. Just 19 percent of the $31 billion would accrue to families with earnings below the poverty threshold, whereas 29 percent would accrue to families earning more than three times the poverty threshold, CBO estimates."
Again, inflation is the main outcome, stealing purchasing power from your parents and your retirement funds, bank accounts, and income. I already know this, and am invested accordingly. I hope you are too.
Just like you think $1,000 an hour is overpriced, I feel the same way about $10.10. $10.10 will be hard for employers to sustain also, that is why people will lose their jobs, as stated by the CBO.
I chose $1,000 because even people that agree with minimum wage increases will give the same reasons not to increase it to $1,000 as I will give not to increase it to $10.10.
Yes, I do think we can make a compromise. The only way to arrive at a TRUE compromise is to let the market decide what wages should be. Otherwise we are influencing the number based on our personal beliefs and personal biases. Your belief is that minimum wage should be $10.10, I think it should be $0.00, someone else thinks $9.25, another person wants $17.00, and so on.
But I do believe this is the exact argument they want us to have, arguing over a number, instead of realizing that the actual number doesn't matter, as someone else pointed out, it is a net neutral effect on employment (even though I would argue it creates unemployment, and the CBO agrees, let's leave all that aside) but the undeniable effect is inflation. Inflation is a tax, and this is a tax increase. It is hard to understand, but it is.
